Tonight, it‘s an uprising. Angry old white folks are storming into town halls all across America spewing lines about health care reform.

Let me set the record straight early on. These folks, I think they‘re dumber than “Joe the Plumber.” And I‘ll tell you what I think we ought to do about combating their misguided passion. And I‘ll go head to head with one of their leaders in the pack in just a few moments.

Thank God everybody is drinking the Kool-Aid. I just held my own town hall meeting in Portland, Oregon, and, man, was the crowd fired up for—you‘ve got it—single payer.

And while millions of you are struggling to pay and scrape by and get your health care bills paid for, the CEO of UnitedHealthcare, this guy is raking in millions of dollars. Award-winning filmmaker Robert Greenwald will be joining me tonight to blow the top off of this story at the bottom of the hour.

And she never fails us—Sarah “Barracuda” Palin. She strikes again.

First she screams at us, at the media, leave her kids alone, and then she blabs on Facebook about her baby‘s medical problems.

Sarah, come on now. You just can‘t have it both ways.

And she‘s behind a lot of misinformation. We‘ll talk about it tonight.

Governor Sanford brags about getting discount haircuts, although the people of South Carolina ought to know that it cost them a grand for the “do” he‘s sporting right now.

Now, seriously, I spoke to Senator Tom Harkin today. He‘s the Senator of the chairman of the HELP Committee, and he told me that he actually had a couple of people today come up to him at town hall meetings and ask, why is Nancy Pelosi and Harry Reid trying to kill them?

Folks, these people are over the top and they‘re not grasping the situation. They are easily led, and it‘s scary.

They‘re being fed lies by right-wing radio. They‘re being fed lies by right-wing talkers on television. And they‘re playing the fear card big time. And they‘re basically depending on these people to go out and do their dirty work.

Now, this is all about a massive misinformation campaign. And the president spoke to it this weekend.

BARACK H. OBAMA, PRESIDENT OF THE UNITED STATES: So, let me explain what reform will mean for you. And let me start by dispelling the outlandish rumors that reform will promote euthanasia or cut Medicaid or bring about a government takeover of health care. That‘s simply not true.

(END VIDEO CLIP)

SCHULTZ: Here‘s where it‘s coming from—Sarah Palin. She‘s playing around with her Facebook account on Friday and put this garbage up on her site: “The America I know and love is not the one which my parents and my baby with Down syndrome will have to stand in front of the Obama death panel so the bureaucrats can decide based on the subjective judgment of their level of productivity in society whether they are worthy of health care. Such a system is downright evil.”

Sarah, what she is referring to here, folks, is the Senate HELP Committee bill. You might want to read this. If you‘re not going to read the whole bill, folks, you might want to read pages 425-430 that deal with end of life issues, a living will, and power of attorney.

Now, the bill calls for the doctor to simply be reimbursed for his consultation with the family. That‘s it.

Now, somehow, the right wing has twisted this and they‘ve turned it into a death panel, a death squad. And the Obama people want to deny you coverage? This is nuts.

Now, Senator Harkin told me today that not one Republican—not one Republican in his committee objected to this clause. But now this is how it‘s showing up in town hall meetings.

The lies are having an effect. The disruptions I think are well orchestrated by the right wing, and they are funded by the industry.

And folks, they‘re not a microcosm of what people are talking about across America.

Now, I started my vacation in Portland, Oregon, with a town hall meeting.

The place was packed and the folks were just hammering about single payer.

Mr. President, you have the people behind you. I‘ve done enough of these to know that there‘s a fraction of Americans out there who are, you know, the old right wing, they‘re playing on the old, angry, White, uneducated, misinformed Americans to go out there and carry the torch of the Republican Party right now to shake it up to defeat. And this is why they use the word “failure,” this is why they‘re trying to generate it.

OK, folks, get your cell phones out. I want to know what you think.

Can President Obama overcome the right-wing lies about health care reform? Text “A” for yes and “B” for no to 622639. We‘ll bring you the results later on in the show.

Now, joining me now is Max Pappas. He is the vice president for public policy of FreedomWorks. FreedomWorks is the health care industry—it‘s a back group led by former congressman Dick Armey and is behind the destructions of all of these town hall meetings.

Max, good to have you.

Why is it that all of these guys named “Max” are screwing up health care reform in this country? No offense.

Mr. Pappas, are you purposely having people go out and tell lies in front of the cameras to try to derail health care reform in this country?

MAX PAPPAS, VICE PRESIDENT FOR PUBLIC POLICY, FREEDOMWORKS: No, absolutely not. We‘ve been a grassroots organization for 25 years. And every recess we tell our members where the town halls are and we encourage them to go and participate. And we did that this recess, too.

SCHULTZ: OK. So, the people that came up to Senator Harkin today, that said that Nancy Pelosi and Harry Reid want to kill them, your organization doesn‘t have anything to do with encouraging these people to show up at these town hall meetings, correct?

PAPPAS: I don‘t know who those people are in particular. We have numbers in every single state, so it‘s hard to say.

SCHULTZ: OK. But you have to take some responsibility, because your organization is telling these folks, with bullet points, with instructions on what to say when they show up at these meetings, correct?

PAPPAS: We have an August recess “Call to Action” for our members, where we describe the situation to them ad we explain what‘s going on in Congress. And some of them are concerned that of the four bills that have passed out of committee, according to the CBO, none of them do any of the things that President Obama is claiming that they do, which is decrease costs or cover enough people.

SCHULTZ: But isn‘t this manufactured, Mr. Pappas? I mean, you‘re supplying information to these people on what to say when they go to these town hall meetings. I mean, you‘re handing them, here, go say this.

Is that not happening?

PAPPAS: We do that every single recess.

SCHULTZ: OK.

PAPPAS: So there‘s a big difference what‘s happening—what we‘re hearing from our members this recess is, wow, we can‘t believe how many other people are turning up and supporting our side. It‘s never like that.

Our same guys are going and they‘re finding a lot more backing. And it can be called manufactured all you want, but eventually the polls are winning out when you see that support for this is going down every day.

SCHULTZ: Well, we did have a poll back in November, and the president‘s been very clear about what he wants.

The point I‘m trying to make here—and just clarify—is that you are coaching, you are instructing Americans who aren‘t quite sure about what health care reform is going to be like in this country to go out and purposely disrupt these meetings.

PAPPAS: No, that‘s not accurate at all. We do the same thing every recess, where we give them information...

SCHULTZ: Wait a minute. Now, respectfully, the videotape that we have been seeing, that‘s playing on this network, is unlike anything we have seen at any other time in contemporary time when it comes to public interaction with elected officials.

Now, is your group coaching these folks to go up and purposely disrupt what‘s going on in these town hall meetings? Yes or no?

PAPPAS: No. And it‘s funny that you show the Tampa town hall, because the guy that you just showed was on our side, against the government takeover of health care. And he was attacked by union members. You can Google it. It‘s the Tampa town hall.

SCHULTZ: Now, Mr. Pappas, do you really believe that the government is going to take over, that there will be no private health insurance companies at all out there? Do you, in your heart, do you believe that there will be a government takeover?

PAPPAS: I just watched the video from President Obama in front of the SEIU from two years ago, and he said that he doesn‘t see it happening immediately if we introduce a public option, but 10, 15 years down the road, he sees the public option taking over for private insurance. Those are the president‘s words himself, you can look it up.

SCHULTZ: But if the people want this, is it not democracy?

PAPPAS: Sure.

SCHULTZ: OK. OK.

PAPPAS: But look at how many people are turning up at town halls. You get a lot more on our side.

SCHULTZ: No, there‘s not a lot more. It depends upon what town hall you go to.

REP. JOHN DINGELL (D), MICHIGAN: Ed, it‘s a pleasure to be with you. Good evening.

SCHULTZ: Have you seen orchestrated town halls like this in your career at any time? Does this remind you of the ‘60s at all?

DINGELL: Well, the last time I had to confront something like this was when I voted for the civil rights bill and my opponent voted against it. At that time, we had a lot of Ku Klux Klan folks and white supremacists and folks in white sheets and other things running around causing trouble.

SCHULTZ: Well, so, this is serious stuff, is what I‘m hearing from you tonight. Right, Congressman?

I have here before me this thing entitled “Right Principles.” It comes from an organization. It was passed out at the meetings we had, and we had two. We had so many, we couldn‘t accommodate them all the first meeting, so we had a second meeting the same night. But in it, they tell what they do and how they do it and why.

Here‘s are some of the things that they say. “Our objective was to pack the hall with as many people ready to challenge the congressman, to put him on the defensive.” Then they go on and they say, “The questions would put the rep on the defensive.”

Then the next page, they say, “Meet and deploy. The team would meet outside the hall with voting record and questions distributed. The team would be also advised to spread out inside the hall. But you try to get seats in the front half.”

SCHULTZ: So Congressman, let me ask you, how do you go back to Washington with a true picture of what the people want if this is what you‘re facing in town halls in your district?

DINGELL: Well, Ed, first of all, I know my district. I‘ve served it for better than 50 years. And I know the people and I know what they care about. So I‘m in a little different position than most members of the Congress. And I have these town halls...

SCHULTZ: OK. You have the experience and you‘ve been around and you know your district. Do you think this kind of activity will intimidate some Democrats who are going to have to make some tough decisions on health care reform? What impact do you think this will have?

DINGELL: Well, I wouldn‘t be at all surprised, Ed, but that‘s the purpose.

And it may very well do so.

I‘m going to tell you something, though. And that is, stimulated behavior of this kind is very bad for a lot of reasons.

First of all, it isn‘t just that it makes life hard for members of Congress. But it‘s really worse because it denies the overwhelming majority of the people at these meetings, who really don‘t agree with this kind of behavior, and who really want to hear and understand, it denies them the right to talk to their congressmen, to ask questions, to tell them their thinking. And for the congressman to explain what he‘s doing and to learn what his people want.

For more, let me bring in Roger Simon, chief political columnist for Politico.

Roger, does this make it a little bit tougher for the president? What‘s his next play? I know he‘s doing four town hall meetings this week. In fact, he‘s going to Max Baucus‘ back yard in Montana. But what‘s the mission at this point in the wake of all of this?

ROGER SIMON, CHIEF POLITICAL COLUMNIST, POLITICO: Oh, I think the president has the guts and the sense to get his health care plan through. I think he‘s willing to compromise with Congress about it.

I don‘t think he‘s willing to compromise with people who stand up and shout at town hall meetings and who are unpleasant, unfair, and, in the end, counterproductive. It‘s counterproductive.

If you‘ve ever been at a town hall meeting or a speech or any kind of a meeting where somebody just stands up and starts yelling, that doesn‘t make you like that person or it doesn‘t convince you of that person‘s argument. You just hate it and you want it to stop. And it doesn‘t do any good.

SCHULTZ: So, do you think that this might actually ignite the left grassroots to really get behind the president and it might be a counter-effect here?

SIMON: I think there will be a counter-effect. I think it actually might put a little steel in the spine of some congresspeople who are wavering on it.

Congresspeople don‘t like to stand there and get yelled at basically by organized hooligans. It doesn‘t make them feel good. And they can read polls, and as Congressman Dingell said, they know their districts in most cases.

They how the people feel. They know how to persuade people. And I don‘t think they‘re going to be persuaded to vote against health care because they‘ll get shouted at.

SCHULTZ: And what about the rhetoric like Sarah Palin writes on her Facebook about Obama administration wants a death panel? I mean, it‘s almost unbelievable that she would go this far.

SIMON: Yes. It‘s both over the top and beneath contempt. You know, putting aside the fact that it‘s a lie and it‘s just simply not true on the facts, you have to wonder where Sarah Palin thinks she‘s living now.

Insurance companies decide every day what medical procedures you will have.

Not your doctor.

Doctors tell you what you need. The insurance companies tell you what they will pay for. They will tell you what drugs they will pay for. They tell you everything about your medical care that they will pay for.

This is what goes on now. This is the—you know, you can‘t say that we‘re going to have death panels in the future. What do you think the status quo is?

SCHULTZ: Yes.

And finally, is there a PR black eye that the Republican Party could walk away with because of all of this? I mean, we‘re in the image business. I mean, you get in front of cameras, you do things, you create an impression.

I mean, is this the Republican Party, the bowels of the party, actually at work?

SIMON: This is the danger for the Republican Party, of increasing danger, that they get categorized and reduced to just a hard-core, hard right-wing mob. And that that‘s their support, and the support comes from the extremes.

And yes, they can win a congressional seat here and there, but they no longer can be a national party. This is what they‘re risking here.

SCHULTZ: Roger Simon, Politico, always great to have you on. Thanks so much for your insight tonight.

Coming up, it‘s getting kind of ugly over there in Pennsylvania, folks. So-called Democrat Senator Arlen Specter is on the warpath against Joe Sestek. Says he‘s willing to go toe to toe with him.

Well, Senator, I hope you‘ve got your steel tips on, because Congressman Sestak has a plan to knock your socks off in the primary. It‘s going to be a dandy.

He joins me next when we come back here on THE ED SHOW on MSNBC.

(COMMERCIAL BREAK)

SCHULTZ: Welcome back to THE ED SHOW.

Pennsylvania Congressman Joe Sestek is officially running for Senate. His first hurdle is taking on born-again Democrat Arlen Specter in the Democratic primary, and Senator Specter is already taking some swipes at his opponent.

Check it out.

(BEGIN VIDEO CLIP)

SEN. ARLEN SPECTER (D), PENNSYLVANIA: When Congressman Sestak starts to throw stones, he lives in a big glass house. The guy has the worst voting record in the Congress from the Pennsylvania delegation. He‘s just 104 votes this year.

If he was still in the service, he would be court-martialed. He‘s been AWOL, absent without leave. If Congressman Sestak wants to go negative, I‘m prepared to battle him toe to toe.

SCHULTZ: Well, let‘s see what the congressman from Pennsylvania has to say about all of that.

Joe Sestek joins us here on THE ED SHOW.

Congressman, what‘s your response to Senator Arlen Specter coming out so aggressively like that. What do you think, Joe?

REP. JOE SESTAK (D), PENNSYLVANIA: Well, Ed, I‘m very proud of my 31 years in the U.S. military, and I think Arlen‘s probably proud of his time in the military back in the early ‘50s. But I just don‘t agree that you need to make personal types of statements about issues that we should be discussing. For example...

SCHULTZ: But he says you‘re AWOL. He says you‘ve missed more votes than anybody else.

Is that true?

SESTAK: Well, I don‘t know. But I do know this—I‘m extremely proud of my 93 percent voting record. I‘m extremely proud that we keep our office open for two and a half years, seven days a week, and have handled three times the constituency cases than any other congressional service.

I‘m very proud that I‘ve had more bills passed this year than Arlen Specter. And I‘m very proud that I‘ve co-sponsored and sponsored more pieces of legislation than any other member of the Pennsylvania delegation.

But I‘ve got to tell you, one vote, Ed, that we‘ve golf to have missed is a vote that‘s voted with President Bush four out of five teams to give us this savaging recession and to send jobs overseas and tax cuts to the rich. That‘s why I‘m working so hard, is to replace that vote.

SCHULTZ: All right.

We‘ve tried to nail down Senator Specter on exactly where he is on a public option. So far, this is the best sound cut we‘ve got. Here it is.

(BEGIN VIDEO CLIP)

SPECTER: I believe that a public option would be very helpful. But it is true that there are many who don‘t agree with that.

JOHN KING, CNN SR. NATIONAL CORRESPONDENT: If the Senate passed a bill without a public option, could it come back in compromised negotiations, or would that kill it?

SPECTER: I think we ought to fully explore the public option to see if we can make it work out.

(END VIDEO CLIP)

Well, Senator—not you, Joe, but Senator Specter—may I say, you‘re either for it or you‘re against it. You want a public option or you don‘t.

I want to get you specifically on the record, Congressman. Are you for or against an exchange? Because in Congress, you have 21 different options as a plan, as a congressional member. This exchange, this public option includes 21 different plans that you can choose from.

SESTAK: They have to have it. Here in the Philadelphia region, where I‘m sitting, 40 percent of Pennsylvanians live. And one company, Ed, has 70 percent of all the private health care plans, and that‘s a monopoly. So, without a public health care plan option, you cannot get fair competition.

Now, that public health care plan option is a choice, and it‘s subsidized by the premiums and co-pays of those in it. But you‘re not paying $23 million to the CEO to run that. And then you get fair competition.

We‘ve got to have it. Whatever you want to call it, we have to have it to have our premiums go down. And that‘s the objective.

The pocketbook of those who have health care now, they will pay less, as we also bring in the uninsured, who we‘re paying for today $400 as they go to the emergency room. Let‘s get them covered and we‘ll eventually pay less as they get preventive care.

Ed, this is the issue that he should be out there with me, throughout Pennsylvania, arguing about why people are hurting with no action the past 15 years since he helped Bob Dole (INAUDIBLE) the Clinton health care plan.

SCHULTZ: Well, I‘m out of time, unfortunately, Joe. We‘re going to have you back, Congressman Sestak. Thanks so much.

SESTAK: It‘s great to be back, Ed.

SCHULTZ: I love your spirit and your fire on this. Thanks so much.

SESTAK: Thanks. And glad to be here.

SCHULTZ: You bet.

We should also point out that the day I went on vacation, in the House, Nancy Pelosi guaranteed those who were supporting single payer that she will bring it up for debate before anything comes out of the House. So can we say that single payer is still alive? I guess we‘d have to legislatively.

Next up on THE ED SHOW, Senator John McCain says this country needs some straight talk about health care. But I think he might sneed a straightjacket after hearing his rant on bipartisanship.

I‘ll have that next in “The Playbook,” or should I say in “Psycho Talk,” next on THE ED SHOW.

(COMMERCIAL BREAK)

SCHULTZ: You called it “Psycho Monday?” I just got, well, it‘s—you never know what day. It‘s “Psycho Talk” all the time.

The Straight Talk Express got another flat tire. John McCain, the senator from Arizona, has let his misguided passion get in the way of facts when it comes to health care reform. Joining the mob of those old angry white folks I mentioned earlier, Mr. Bipartisanship is whining that the Senate Republicans didn‘t have a hand at all in crafting the HELP Committee‘s bill.

Check this out.

(BEGIN VIDEO CLIP)

SEN. JOHN MCCAIN ®, ARIZONA: Unfortunately, there was no input by Republicans in the writing of the bill. In the HELP Committee, it was all a Democrat proposal. That‘s not the way you want to begin if you‘re really interested in true bipartisan result. Maybe we can go back in all of this, and I‘d be glad to play a role.

(END VIDEO CLIP)

SCHULTZ: That went unchallenged.

The warmonger has now become the fear-monger on health care.

If Mr. Country First would have just actually read the bill, he would see that there were over 160 Republican amendments on the legislation that the committee passed.

For old John McCain to flat-out lie about this bill is seriously, angry, uneducated, misinformed and misguided “Psycho Talk.”

Coming up, Caribou Barbie is back at it, and it‘s having an effect on health care debate in this country. What kills me is that people are actually believing her despicable lies. And I‘ll tell you what I think we can do to combat all of that nonsense.

Plus the love gov; he got a new hairdo with a price tag that would even make John Edwards blush. But there‘s a kicker. See you folks down in South Carolina, you paid for that man-scaping. We‘ll get into the hairy details later on THE ED SHOW. Stay with us.

SCHULTZ: President Obama and progressives in Congress are facing some pretty fierce competition to their health care reform efforts. They‘re up against Republicans, Blue Dogs and those right wingers who have been disrupting town hall meetings across America. But they also have to contend with insurance CEOs, who are lobbying hard against any kind of reform. It‘s not hard to figure out why. The CEOs are maintaining wildly extravagant lifestyles by denying patients care.

The production company Brave New Films just put out a new film exposing one of those guys, like United Health Care Group‘s Steven Hemsley.

(BEGIN VIDEO CLIP)

STEVE HEMSLEY, UNITED HEALTH GROUP: My name is Steve Hemsley and I‘m the president and chief executive of the United Health Group. Our mission at United Health Group is to help people lead healthier lives.

UNIDENTIFIED FEMALE: The CEO of United Health Group, Steven Hemsley, his salary 3.2 million dollars.

UNIDENTIFIED MALE: The incredible gross profits of the private health insurance industry that is at the core of the problem.

UNIDENTIFIED FEMALE: Two years ago, I think the president of United Health Care made so much money that one in every 700 that was spent in this country on health care went to pay him.

SCHULTZ: Profits these insurance companies are making, folks, absolutely, they are obscene.

(END VIDEO CLIP)

SCHULTZ: In case you‘re wondering, that guy speaking at the end was your favorite talk show host, Ed. I would like to remind you about the outcry from the Congress and Americans when those auto industry executives -- remember when they flew those corporate jets into Washington, when they were looking for a bailout? The media was stuck on that story for two weeks. Those trips cost about 20 Grand. You know, to fly that G-4 or G-5 in there from Detroit, 20,000 dollars in gas.

Joining me now is political activist and director of Brave New Films, Mr. Robert Greenwald. Robert, great to have you back with us tonight.

ROBERT GREENWALD, BRAVE NEW FILMS: Thanks.

SCHULTZ: What motivated you to do this story and go after the executives?

GREENWALD: Greed, obscenity, anger and real fury among my colleagues at Brave New Films, who are focused on the fact that this is a story, Ed, that‘s not being told. It‘s a fundamental issue. And I really think that our country is facing one of those critical moments where we look in the mirror and decide who we are and who we are not.

Now these men, Hemsley, is making this money by literally, not figuratively, taking it out of your pocket, and putting it into his mansion. I don‘t know how he sleeps at night, in any one of his eight or nine or ten or 12 bedrooms, knowing they‘re being paid for by denying care to you, being denied care to your family, and to your children.

That‘s obscene. And we‘re proud to be able to bring this to people‘s attention, and say enough is enough. We‘re mad as hell.

SCHULTZ: Now your documentary, basically, explains the horror stories that Americans are going through. Here‘s one example of what is in your short documentary, dealing with the health insurance companies. Here it is.

UNIDENTIFIED FEMALE: He was six months old. We were at the pediatrician, and he mentioned that Dylan would probably need the Doc Brand Helmet to correct the plasiocephaly (ph). If he didn‘t wear this helmet, he could potentially have issues eating. Two months into the treatment, we got the denial letter from United Health Care, saying that they weren‘t going to cover it.

They viewed the helmet as cosmetic.

(END VIDEO CLIP)

SCHULTZ: Mr. Greenwald, are you basically saying here that that child and many other Americans could be covered if they weren‘t taking us to the cleaners in the front office, and you‘re using the example of the CEO? Is that where you‘re coming from?

GREENWALD: Look, there‘s no question about it. Think of it, if the fire department or the police department were a for-profit entity. And every time they went to a fire or arrested somebody, they were profiting from it. Only here it‘s exactly the opposite. Every single time they deny you, every single time they cut off your insurance, and every single time you say, claim rejected, it‘s going into Steven Hemsley‘s pocket to build a bigger and more obscene mansion.

SCHULTZ: Well, let‘s talk about his pocket. In 2008, these are the kind of numbers he had. His compensation was 3.2 million dollars. His unexercised stock options were 744 million dollars. In 2009, this year, the guy‘s looking at four million dollars a week in gross pay. That‘s 819,000 dollars a day. That equates to just over 102,000 dollars every hour.

Do you think, based on your experience of documentaries, that this kind of testimony, and these kind of numbers will get the attention of those in the Congress to realize that we absolutely have to have some kind of regulation?

GREENWALD: Well, we‘re counting on people like you, Ed, and your audience to spread the word. If you go to Sick For-Profit, you‘ll see the video and then send it around. Send it to your Congressman. Send it to your church. Send it to voters. Send it to your family. And send it to people who may be disagreeing with us. But damn it, when they see this video, I believe it can bring many people together in saying, enough is enough.

SCHULTZ: It‘s not the free market. You‘re not willing to say this is just how the free market works?

GREENWALD: No, this is the opposite of the free market. This is a manipulated market, controlled by a few greedy profiteers who are literally making the money off of the backs of sick people. Taking it away from them and saying, you can‘t have a doctor; you can‘t get that treatment; I need a bigger mansion.

SCHULTZ: Mr. Greenwald, always a pleasure, great work, good to have you with us tonight. Thanks so much.

SCHULTZ: You bet. Let‘s bring in our panel, Nancy Giles, writer and commentator, Sam Stein, political reporter for the “Huffington Post,” and also Michael Medved, nationally syndicated radio talk show host. At the beginning of this segment, I talked about the media coverage and the outcry of the people. How in the world could the car executives take those jets to Washington, D.C. and testify. Heck, it costs 20,000 dollars in gas to run those things.

Folks, these numbers are staggering. Who can justify—even on my job -- 102,000 dollars an hour? And we don‘t need reform?

NANCY GILES, POLITICAL COMMENTATOR: And they‘re denying care to people who pay for it.

SCHULTZ: Help me out with this one.

GILES: No, there‘s no justification for it at all. This is a ponzi scheme. People should be as outraged by this as they were by Bernard Madoff. It‘s the same thing. You‘re paying into a system that‘s not paying you or treating you fairly. And I think that every town hall meeting should start with this kind of information, and start with a personal story of a person who is suffering because of their health care insurance the way it stands now.

We‘ve got to make these stories personal. And like short sound bites, like too much money for not enough cause.

MICHAEL MEDVED, RADIO TALK SHOW HOST: I‘ve got to tell you, I think this is actually why your side, according to all the polls and just listening to people, is losing this argument. And I‘ll tell you why, because the big concern for most Americans is preserving their own insurance.

Eighty five percent of the country has insurance; 77 percent of those people like their insurance. And look, if you can go ahead and put Mr. Hemsley in jail, it isn‘t going to insure a single other person.

SCHULTZ: But Michael—

MEDVED: The question that people are asking for, Ed, is who is going to pay the bill, if you‘re going to insure 40 million new people.

SCHULTZ: What I want to do is repeal the Bush tax cuts. I‘ll answer that for you, Michael.

MEDVED: That‘s not enough.

SCHULTZ: That‘s the way it is. Let me get back to this. We‘ve talked about this before. You‘re saying that 85 percent of the American people are happy with their coverage. Wait a minute, those are the people who have the coverage. We‘re talking about 50 million people that don‘t have anything, and 82 million people who have had to go without it at some time or another in the last two years.

My question is you say this is attacking the free market and not gouging the consumer; am I hearing that right, Michael?

MEDVED: No, I‘m not saying it‘s attacking the free market. I‘m saying it is attacking Americans where they live. They depend on their insurance. Most Americans get their insurance from work right now. One of the things that the president—

rMD+IN_rMDNM_And people understand this. The president is not telling the truth on this. When he says if you‘re happy with your insurance, you‘ll be able to keep it. I had a caller on my radio show today, a small businessman, and he supports the president. And he said, one of the reasons he likes the health care reform is because he‘ll be able to drop insurance for his employees, and put them in the government plan.

SCHULTZ: Michael, that‘s misinformation. The point here is the president has made it very clear, if you like what you have, from the Salem Radio Networks—I don‘t know what your gig is—you can keep it, my friend. It‘s not government-operated. No one‘s going to mandate anything to you on that.

MEDVED: However, if you make it to pay for your employer—in other words, what this gentleman was saying to me—and it‘s absolutely true. Under the plans that are coming through the House of Representatives, it will save money, big money, for small business-people to drop insurance, put the people on the government plan. And then what they pay into the government is much less than they were paying to insure their employees.

SCHULTZ: But they don‘t have to. If they like it, they can keep it. Sam Stein, what‘s the tightrope that the president walks right now with all of these town hall meetings taking place? And there‘s an image out there that‘s there an outcry and a push-back that any kind of reform isn‘t good reform. What do you think?

I was in the White House today, at a briefing. And they‘re very acutely aware that there is a tightrope that‘s being walked. They don‘t necessarily like the idea that they‘re getting heckled or that the Democratic lawmakers are getting heckled.

At the same time, there is a sense that, you know, it‘s not the worst thing in the world to happen. There is division within the Democratic caucus over what the proper route to reform is. And as long as the attention is being paid to people like Sarah Palin, talking about death squads and euthanasia, then the attention is not being paid to the frictions within the Democratic party.

One other thing; this Robert Greenwald video is exactly what Democrats are trying to do, which is set up the enemy. You know, there hasn‘t been an enemy for the Democratic party to attack in the whole health care debate. They‘re switching it to health insurance reform. They‘re talking about protections for consumers.

This is the type of messaging that works. They know it works. This is going to go.

SCHULTZ: And Sam, it‘s real stuff. I want to point out at these town

hall meetings, these aren‘t young people. The 20-somethings and the 30-

somethings and the 40-somethings, they‘re not showing up. These are all—

watching the other channel, getting all nervous about where this is all

going. The irony of this is, the very people the president is trying to

help are the people that are showing up, taking the bullet points and being

--

STEIN: Exactly.

SCHULTZ: It just amazes me. All right, stick around. We‘ve got a lot more coming up with this panel. Stay with us, folks.

And also stick around, because it‘s moving day down at the governor‘s mansion down there in South Carolina. No, he‘s not moving in his Latin lover, but the better half is cutting and running, that‘s for sure. Good for her. Everyday we learn something new about this shady character. Get this, he was using the state plane for personal use. Detail on that when we come back here on THE ED SHOW on MSNBC.

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SCHULTZ: In my playbook tonight, it‘s time for the South Carolina governor to go, buddy, go. We just learned from the chairman of the South Carolina Legislative Committee investigating Sanford‘s international trips, he now says that the governor broke state law, which requires using the cheapest travel possible. Now this kind of violation could get him impeached. Honky-tonks will get you every time, folks.

It‘s not only the travels where he was going that got him in trouble. There‘s some other stuff. It turns out that the taxpayers footed the 1,200 dollars it cost to fly him to Myrtle Beach in Columbia, in a state plane, to get a haircut. That‘s right, the Associated Press reports he charged taxpayers for the trips to hair and dentist appointments, his son‘s football games, family vacations and parties held by political donors.

What is happening with this? Joining me now is South Carolina State Rep Todd Rutherford. Mr. Rutherford, if he broke the state law, what does that mean at this hour?

TODD RUTHERFORD, SOUTH CAROLINA STATE REPRESENTATIVE: Certainly, it means there are grounds for impeachment. Should the legislature decide to do so, apparently now there are grounds for impeachment. And I bet you, if we keep on digging, we‘ll find more.

Here‘s a guy that didn‘t want to take stimulus money from Obama and stood up to Obama and said, no, we don‘t need your money down here, although our schools are failing. Yet, he‘s paying—and we‘re paying 1,200 dollars for him to fly back and get a 10 dollar haircut that he could have gotten in Myrtle Beach.

SCHULTZ: Doesn‘t this say something about oversight in state government in the state of South Carolina, that the governor is allowed to get away with this? There just has not been a full accounting of what he‘s using with the state airplane.

RUTHERFORD: You know, Ed, it goes way beyond that. Here‘s a guy that makes state employees write on both sides of Post-It notes. He made state employees room together in hotel rooms. Yet he was flying back on the state airplane to go and watch his son play football.

Again, we understand the busy schedule that a governor has in any state. But certainly this man, who stood up and told state employees all these things, and told teachers that they were going to lose their jobs because he did not want to take stimulus money, should not be using the state airplane the way he did, or flying first class to Argentina and making the taxpayers pay for it.

SCHULTZ: So, senator, will you lead the charge and be the first one to step up and say, I want to impeach this guy?

RUTHERFORD: You know, I‘ve already requested that he resign. I have said it over and over again. I think Senator Thomas has already said that we‘re going to look into impeaching him. I have to look into that. If not, I certainly will. This guy thinks he works for United Health Care or something.

SCHULTZ: Well, look, if you‘ve got somebody who is looking into this on the legislative committee, and comes up and makes the bold statement, and says, look, this guy broke the law; isn‘t it your obligation as a lawmaker to make sure that this guy‘s impeached and run out of office, because he broke the law? Doesn‘t the governor have to answer for this?

This goes beyond any affair right now. This goes beyond any girlfriend. This is how he manages his office. What do you think?

RUTHERFORD: Absolutely. And it also goes beyond impeachment, because, as you said, he did break the law. And South Carolina law enforcement division does need to take another look at it to see, did he, in fact, as we are saying, break the law. If so, he is subject to be arrested and put in jail for this, not just impeached.

So it goes much further than just being impeached, and much further than us just looking into it as a legislative body. The criminal authorities needs to take a look at this.

SCHULTZ: Mr. Rutherford, great to have you with us tonight on THE ED SHOW. Thank you.

Next up, I want to know why every time Sarah Palin makes a statement about what people should be doing or not doing, she turns around and breaks her own rules? We‘ll talk about that with our panel next on THE ED SHOW. Stay with us.

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SCHULTZ: Welcome back to THE ED SHOW. Of course, it came from the mouth of Sarah Palin, or rather the Facebook page of the Quitster. Children and old people will have to stand in front of death panels to find out if they‘re worthy for living. Can you believe that? Time to bring back our panel, Nancy Giles, Sam Stein and Michael Medved.

Nancy, what do you make of this? On Friday, we have Sarah Palin putting this on her Facebook, that the Senate health bill, Help bill is calling for a death panel.

GILES: Death panel, yes.

SCHULTZ: And then of course, today—

GILES: She had to renege it because there is no death panel. I mean, you know what happens, Ed? Every time I hear her say anything, I blame John McCain for making her a national figure. She is cute. She can read a teleprompter well. But she is just not invested that much in the facts.

And the problem is there are people who really do listen to what she says. And little key phrases like death panel, that makes people frightened and makes people think that there‘s something wrong with the health care reform.

SCHULTZ: Michael Medved, death panel; to be or not to be; what is Sarah Palin doing?

MEDVED: Well, what she‘s doing is embarrassing herself and hurting the cause. I, on the radio today, indicated to my listeners that this simply wasn‘t true. What is true is that health care rationing is a real issue. But this whole notion that somehow President Obama is going to kill granny or kill Trig Palin, even worse, that‘s unacceptable. And we‘ve got to focus on the real issue, which is paying for this very expensive reform, which the administration has not answered at all.

SCHULTZ: They haven‘t answered, you‘re right on that, Michael. They have not answered how they‘re going to do it. So I‘m doing it for them. We‘re going to repeal the Bush tax cuts and we‘re going after guys like you. That‘s what we‘ve got to do.

Sam Stein, how can the Republican party keep a straight face when they are allowing people to take manufactured material, to go in and disrupt this? This is somewhat scorched-Earth policy, is it not?

STEIN: Yes, it‘s definitely scorched-earth policy. I‘m gathering that their tactic here is just to distract attention from an honest debate. I don‘t really know where it‘s going. I think it will back-fire.

SCHULTZ: But isn‘t Sarah Palin fueling all of this by doing this kind of stuff?

STEIN: Oh, yes. And I actually do applaud all the media folks out there who fact-checked this claim, and called it for what it is, which is outrageous. And it sort of delegitimizes what is a really serious issue, which is end of life consultations, which matter to a lot of people who are suffering with terrible diseases towards the end of their life.

Why can‘t we engage in a serious debate on that issue? I don‘t get why the Republican party would want her to be the spokesperson on this issue.

SCHULTZ: Well, apparently the legislative session up in Alaska has just voted to overturn her veto. And they‘re taking all the stimulus money they can possibly get. Nancy, thanks for joining us. Michael Medved and Sam Stein, always a pleasure.

Earlier we asked you: can President Obama overcome the right-wing lies about reform? Ninety percent of you said yes; 10 percent said no. That‘s THE ED SHOW. I‘m Ed Schultz. Great to be back with you here. We‘ll be back tomorrow night, of course. For more information on THE ED SHOW, go to Ed.MSNBC.com or our radio website, WeGotEd.com.

“HARDBALL” with Chris Matthews is next on MSNBC.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.